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Social Security Lifts 22 Million Americans Out of Poverty

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Social Security lifted 22 million people out of poverty last year, our new analysis of Census data finds. Social Security’s anti-poverty effect extends to every state, lifting more than 1 million elderly people out of poverty in California, Florida, and Texas, our 50-state analysis shows.

Without Social Security benefits, 41 percent of elderly Americans would have incomes below the official poverty line, all else being equal. With Social Security, only 9 percent do. (See graph.)

Social Security is also important for non-elderly adults and children. (See table.) It lifted more than 1 million children from poverty in 2015. Some of these children receive benefits because a parent died, became disabled, or retired; others live with relatives who receive Social Security.

Given the program’s powerful anti-poverty impact, cuts in Social Security benefits could significantly raise poverty — particularly among the elderly and the disabled — depending on their design.

Social Security benefits are already modest, both in dollar terms (the average retired worker receives $1,328 a month) and by international standards. Also, elderly Americans depend heavily on their Social Security benefits — particularly women and minorities. A third of beneficiaries receive at least 90 percent of their income from Social Security; 61 percent of beneficiaries receive more than 50 percent of their income from the program.

While policymakers should work to close Social Security’s long-term funding gap, they should remember that this program is a vital part of the safety net for Americans of all ages.

TABLE 1

Effect of Social Security on Poverty, 2015

Age Group

Percent in Poverty

Number Lifted Out of Poverty By Social Security

Excluding Social Security

Including Social Security

Children Under 18

21.2%

19.7%

1,078,000

Adults Ages 18-64

15.4%

12.4%

5,944,000

Elderly Age 65 And Over

40.5%

8.8%

15,067,000

Total, All Ages

20.5%

13.5%

22,090,000

Source: CBPP, based on data from the Census Bureau Current Population Survey, March 2016